Incredibly, the third quarter and the 4th of July holiday are upon us. While the stock market has had an up and down June, and for that matter, a second quarter, the S&P 500 is up almost 9% year to date. The problem for many investors is that almost every stock you look at seems to be hitting 52-week or all-time highs, and that makes stock picking, which is critical in an aging bull market, all that more critical.

We decided to screen the Jefferies Franchise Picks list, a portfolio of the firm’s highest conviction ideas, for stocks that are reasonably valued and offer some upside from current trading levels. We also screened for companies that paid consistent dividends and are not trading at highs. We found five outstanding picks that make good sense for the second half of 2017.

Ally Financial

This company is the old financing arm of GM that was known before the great recession as GMAC. Ally Financial Inc. (NYSE: ALLY) has been rebuilt into a stronger and more solvent Internet-focused bank with no brick-and-mortar locations. Its customers do their banking solely through the bank’s website, its mobile application, and automatic teller machines.

Jefferies feels that in comparison to peers, though few are actually structured like Ally, the stock is very cheap. With shares trading at a low 9.12 times estimated 2017 earnings, and at a minuscule one times book value, the analysts feel that there is room to run. In fact, their work indicates the stock should trade at more like 1.25 times book value.

With the capital structure optimized and management having diversified the origination’s platform ahead of expectations, the stock has tremendous value at current levels.

Ally Financial shareholders are paid a 1.56% dividend. The Jefferies price target for the stock is $28. The Wall Street consensus target is at $25.44, and the shares closed on Monday at $20.76 apiece.

Chevron

This integrated giant is a safer way for investors looking to stay or get long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.

The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG). Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.

The company reported solid earnings for the first quarter, and the Jefferies analysts have noted that the Permian Basin remains a key source of capital flexibility, and it is a key issue behind their relative preference for Chevron versus some of the other majors.

Chevron shareholders are paid an outstanding 4.11% dividend. Jefferies has a $135 price target for the stock, while the consensus price objective is lower at $122.48. The stock closed Monday at $104.14 a share.

KeyCorp

This is one of the midcap banks that make good sense now. KeyCorp (NYSE: KEY) operates as the bank holding company for KeyBank National Association, which provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses.

The company also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets banner.

The Jefferies analyst likes the larger regional banks, noting that valuations look very reasonable and cost saving plans are helping to make forward estimates look very achievable. With overall credit remaining solid, earnings and loan, deposit and fee growth all are positive metrics for the bank.

KeyCorp investors are paid a 2.1% dividend. The $21 Jefferies price target compares with the posted consensus target of $20.04. The shares ended Monday’s trading at $18.12 apiece.

Newell Brands

This top consumer goods stock is a safe play for investors worried about a toppy market. Newell Brands Inc. (NYSE: NWL) is a manufacturer and marketer of consumer products has six reporting segments, including the recently acquired Jarden.

The segments are: Writing (Sharpie, Paper Mate, Waterman, Parker), Home Solutions (Rubbermaid, Calphalon, Goody), Tools (Irwin, Lenox), Commercial Products (Rubbermaid Commercial Products, Rubbermaid Healthcare), Baby & Parenting (Graco, Aprica) and Jarden (with 120 brands including Yankee Candle, Jostens, Oster, Sunbeam, Mr. Coffee, K2, Marmot, Rawlings, Coleman and First Alert).

Top Wall Street analysts see upside from cost synergies, more acquisitions and portfolio rationalization that could drive operating margins and the multiple. Last month the company announced the sale of its Winter Sports business for $240 million representing 9.6 times 2016 EBITDA. The sale of Winter Sports increases focus on the go-forward portfolio, while also providing cash for delevering or mergers and acquisitions.

Investors in Newell Brands are paid a 1.57% dividend. Jefferies has set its price target at $65. The consensus price objective is at $58.71, and the shares closed most recently at $53.34.

Textron

This company was added to the portfolio earlier this year and has acted very well. Textron Inc. (NYSE: TXT) is a multi-industrial conglomerate that has the following operating segments:

1. Textron Aviation manufactures light-to-medium-sized aircraft.
2. Bell comprises Bell Helicopter and Textron Systems.
3. Industrial Products manufactures machinery and equipment for golf/turf, wire and cable installation systems, plastic fuel tanks (Kautex), pumps, gears and gearboxes.
4. Textron Financial is a commercial lending operation that primarily provides equipment financing.

The analysts point out that the company has a very solid new product pipeline, and they feel the company is demonstrating that new products are the superior solution to combating tough end markets. The new product pipeline includes the Scorpion, Longitude, Denali, Hemisphere, V-280 and V-247.

Textron investors are paid a small 0.17% dividend. The Jefferies price target is $60, well above the posted consensus target of $52.50. The stock closed most recently at $45.57 a share.

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These are five top stocks for investors to consider for the rest of the year. They all pay solid dividends, are trading at reasonable valuations and are not at 52-week or all-time highs. All five make good sense for long-term growth and income portfolios.

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